Legislature(2005 - 2006)
05/02/2005 10:36 AM Senate FIN
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 24(STA)
"An Act relating to reemployment of and benefits for retired
teachers and public employees and to teachers or employees who
participated in retirement incentive programs and are
subsequently reemployed as a commissioner; and providing for
an effective date."
This was the second hearing for this bill in the Senate Finance
Committee.
Amendment #1: This amendment deletes all material in Sections 14
and 15 beginning on page seven line 13 through page eight line
seven and inserts the following language.
Sec. 14. The uncodified law of the State of Alaska is
amended by adding a new section to read:
APPLICABILITY OF SECS. 2, 4, AND 5 OF THIS ACT TO RETIRED
TEACHERS MAKING AN ELECTION UNDER AS 14.25.043(b) OR (e)
BEFORE JULY 1, 2005. (a) A retired teacher who was rehired and
made an election under AS 14.25.043(b) or (e) before November
3, 2004, may continue to receive retirement benefits and
medical benefits under AS 14.25.043(b) or (e) from July 1,
2005, through December 31, 2006, if that teacher continues to
serve in the same position. However, on January 1, 2007, the
period of reemployment to which the teacher's original
election under AS 14.25.043(b) or (e) applied is considered
terminated. If the teacher continues as an active teacher,
that teacher may not continue to receive benefit payments
while working as an active teacher unless the employer rehires
the teacher under AS 14.25.043(b) or (e), as amended by secs.
4 and 5 of this Act, on or after January 1, 2007.
(b) A retired teacher who was rehired and made an
election under AS 14.25.043(b) or (e) on or after November 3,
2004, may not continue to receive retirement benefits and
medical benefits under AS 14.25.043(b) or (e) after June 30,
2005. On July 1, 2005, the period of reemployment to which the
teacher's original election under AS 14.25.043(b) or (e)
applied is considered terminated. If the teacher continues as
an active teacher, that teacher may not continue to receive
benefit payments while working as an active teacher unless the
employer rehires the teacher under AS 14.25.043(b) or (e), as
amended by secs. 4 and 5 of this Act, on or after July 1,
2005.
(c) This section does not apply to an employer who may be
required to provide health and medical benefits under AS
14.25.043(b), as amended by sec. 4 of this Act, regardless of
whether a teacher receives retirement medical benefits under
this section.
Sec. 15. The uncodified law of the State of Alaska is
amended by adding a new section to read:
APPLICABILITY OF SEC. 7 OF THIS ACT FOR RETIRED EMPLOYEES
MAKING AN ELECTION UNDER AS 39.35.150(b) OR (e) BEFORE JULY 1,
2005. (a) A retired employee who was rehired and made an
election under AS 39.35.150(b) or (e) before November 3, 2004,
may continue to receive retirement benefits and medical
benefits under AS 39.35.150(b) or (e) from July 1, 2005,
through December 31, 2006, if that employee continues to serve
in the same position. However, on January 1, 2007, the period
of reemployment to which the employee's original election
under AS 39.35.150(b) or (e) applied is considered terminated,
and, as to that employee,
(1) AS 39.35.150(b), as amended by sec. 7 of this
Act, or AS 39.35.150(e) applies; and
(2) if the employee continues as an active member,
that employee may not continue to receive benefit payments
unless the employer hires the employee as a result of the
competitive hiring process required by the applicable
subsection of AS 39.35.150(f), (g), and (h), added by sec. 8
of this Act, on or after January 1, 2007.
(b) A retired employee who was rehired and made an
election under AS 39.35.150(b) or (e) on or after November 3,
2004, may not continue to receive retirement benefits and
medical benefits under AS 39.35.150(b) or (e) after June 30,
2005. On July 1, 2005, the period of reemployment to which the
employee's original election under AS 39.35.150(b) or (e)
applied is considered terminated, and, as to that employee,
(1) AS 39.35.150(b), as amended by sec. 7 of this
Act, or AS 39.35.150(e) applies; and
(2) if the employee continues as an active member,
that employee may not continue to receive benefit payments
while an active member unless the employer hires the employee
as a result of the competitive hiring process required by the
applicable subsection of AS 39.35.150(f), (g), and (h), added
by sec. 8 of this Act, on or after January 1, 2007.
(c) This section does not apply to an employer who may be
required to provide health and medical benefits under AS
39.35.150(b), as amended by sec. 7 of this Act, regardless of
whether a member receives retirement medical benefits under
this section."
In addition, the amendment inserts a new bill section on page
eight, following line 15 as follows.
Sec. 20. Sections 2, 4, 5, and 7 of this Act take effect
July 1, 2005."
Furthermore, " sec. 19" is deleted in Sec. 20 page eight line 16
and replaced with "secs. 19 and 20".
Co-Chair Wilken moved Amendment #1.
Co-Chair Green objected for explanation.
MIKE TIBBLES, Deputy Commissioner, Department of Administration
explained that the amendment would modify Sections 14 and 15 of the
bill. Those sections would "establish three different groups of
individuals that have three separate termination dates for the
period going forward for their rehire." The previous committee
substitute, Version 24-LS0211\X, "did not clearly identify those
three different groups and did not clearly identify when their
period of reemployment would be terminated". This amendment would
clarify the issues pertinent to those three groups. The first group
would consist of retired individuals rehired prior to November 3,
2004. That was the date upon which the Department had notified
Public Employees Retirement System (PERS) and Teachers Retirement
System (TRS) employers in the State that the program would
terminate July 1, 2005.
Co-Chair Green asked for further discussion in regards to the
notification date, as she understood that an earlier notice had
been sent to PERS/TRS employers in September 2004.
Mr. Tibbles clarified that the Department's first notification had
been provided in November 2004. However, he noted that the
Department had received a Department of Law legal memorandum [copy
not provided] previous to that.
Co-Chair Green ascertained therefore, that the Department of Law
memorandum might have been received in September. However, the
Department of Administration notification letter had been
distributed in November.
Mr. Tibbles concurred.
2:48:47 PM
Co-Chair Green recapped the amendment discussion to this point.
Mr. Tibbles clarified that a retired rehiree hired prior to
November 3, 2004, could continue to receive retirement and medical
benefits from July 1, 2005 through December 31, 2006.
Co-Chair Green understood that that person would then be
terminated.
Mr. Tibbles affirmed that as of December 31, 2006 "the period of
employment for the purposes of the rehire program would be
terminated".
Mr. Tibbles communicated that that person would then have the
option to remain an employee and be subject to the status they held
before the rehire program began: they would contribute to the
system and accrue additional benefits for their retirement;
however, their retirement benefits would be suspended. Or, they
could terminate their employment and "continue to receive their
retirement benefits".
Co-Chair Green asked regarding the terms of the second group of
retired rehirees.
Mr. Tibbles explained that the second group of retired individuals
would have been rehired after November 3, 2004.
Co-Chair Green understood that this groups' participation in the
rehire program would be terminated on June 30, 2005. Thereafter,
they could continue as an active employee but would be unable to
continue to receive retirement benefit payments unless they were
rehired under AS 14.25.043(b).
2:50:45 PM
Mr. Tibbles stated that the period of re-employment for the second
group of individuals would end on June 30, 2005.
Mr. Tibbles stated that the third group of rehired retirees would
consist of those rehired after July 1, 2005. Those individuals
would be required to apply for their position through the
"sideboards" established in this bill. Those sideboards would
include such things as requiring the employer to document that
specific recruitment efforts had been made. In addition, the
employer would be required to contribute to the unfunded liability
for that employee at the same rate paid for all other employees and
they would be required to provide active health care for those
employees working full time.
2:52:45 PM
In response to a question from Co-Chair Green, Mr. Tibbles
explained that TERS employees are addressed in Sec. 14 and PERS
employees are addressed in Sec. 15 of the amendment. While the
conditions in both sections mirror each other, there is a different
set of recruitment standards for PERS employers.
Co-Chair Green asked the reason that PERS employees rehired prior
to November 3, 2004 would continue to receive their retirement
benefits until December 31, 2006.
Mr. Tibbles explained that, "those individuals were told in many
cases that they could continue to receive their benefit for the
period of their reemployment." That was a liability issue.
Co-Chair Green acknowledged.
2:54:01 PM
Co-Chair Wilken commented that while the concept of this bill is
good; it is a confusing bill to understand, as attested by the fact
that the Committee is continuing to struggle with the sequences of
the dates. Therefore, he suggested that a visual timeline be
developed that would specify the benchmark dates and other
pertinent information. This would assist other Legislators in
understanding the terms of the bill "as it marches ahead."
Co-Chair Green concurred.
Senator Stedman concluded that, as of January 1 2007, regardless of
whether an individual were a PERS or TRS member, the rehire benefit
program as currently defined, would end. At that point, any retired
rehiree must be subject to the proposed "new screening process".
Provisions in this bill would provide transition time to existing
rehired retirees.
2:55:53 PM
Mr. Tibbles agreed.
Senator Stedman communicated that he had initially understood that
the program would end earlier than currently proposed; however, he
accepted the "compromise" that has been reached.
Co-Chair Green removed her objection to the Amendment.
There being no further objection, Amendment #1 was ADOPTED.
Co-Chair Wilken moved to report the bill, as amended, from
Committee with individual recommendations and accompanying fiscal
notes.
There being no objection CS SS SB 24(FIN) was REPORTED from
Committee with new zero fiscal note dated March 2, 2005 from the
Department of Administration.
2:58:41 PM
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